Property Rights: Ensuring the Public Good Despite Koontz

Property Rights: Ensuring the Public Good Despite Koontz

During its 2012-2013 term, the Supreme Court heard and decided three cases about takings; in each case the Court held in favor of the landowner.[1]Koontz v. St. John’s River Water Management District, 133 S. Ct. 2586 (2013), was the most influential of them all. This opinion left scholars concerned about its implications on future takings cases.[2] Indeed, Vermont Law School professors, Sean Nolan and John Echeverria both predicted that the Koontz decision would undermine efforts by local governments to regulate land use in a way that benefits communities’ environment and economies the most.[3]

This Note explores the application of the Court’s Koontz reasoning to two cases in California involving local inclusionary housing policies. First, in Levin v. City of San Francisco, 71 F. Supp. 3d.1072 (N.D. Cal. 2014), the plaintiffs prevailed in their facial challenge against a city law requiring they make a single pay-out of over $117,000 to their tenant in order to take back the apartment and live in it themselves.[4] Second, in California Building Industry Ass’n v. City of San Jose, 351 P.3d 974 (Cal. 2015), the plaintiffs failed in their facial challenge against a city ordinance that required developers to set aside 15 percent of any new development for affordable housing on-site, or choose one of three additional options (some of which include paying money or setting aside off-site land) that will be used to increase the city’s supply of affordable housing.[5]

If courts must deviate from the takings standards set forth in Lingle v. Chevron, 544 U.S. 528, 547 (2005), they should limit their application of Koontz, and instead apply Nollan v. California Coastal Commission, 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994), to land use decisions. Courts should not analogize the facts in Koontz to those in any other case. Based on the Courts own rationale in Koontz, a different result should have occurred in that very case.[6]

If courts continue to apply the Koontz reasoning, however, local governments can still keep their control of local land use by 1) crafting clear statutes that explicitly state the goal of their ordinance and how it counts as a legitimate state interest,[7] 2) provide a variety of defined options for complying with the terms of the statute[8], 3) ensure that those options directly and proportionately address the harm caused by any proposed development, [9] and 4) include at least one option that does not require a payment of money to the government.[10]

Part I of this Note will discuss the details of Koontz and various scholarly predictions immediately following its publication.[11] Part II will explain how two California courts applied the reasoning from Koontz to two different local inclusionary housing ordinances. Next, Part III will analyze the effect of Koontz on legislative versus adjudicative decisions. Finally, Part IV will conclude that Koontz requires local governments to pass more comprehensive statutes, which delegate decision making to boards only based on unambiguous statutory requirements.

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